Standard & Poor's gives state a boost, upgrades California's bond outlook
02/15/2012 12:00 AM
02/15/2012 10:50 AM
Standard & Poor's improved California's bond outlook from stable to positive Tuesday, a signal that the deficit-ridden state could be in line for a ratings bump.
The state's A-minus rating is S&P's lowest among U.S. states.
In a 15-page analysis, S&P said that the state's new majority-vote budget requirement is a major reason why the state now has a positive outlook. Voters approved the requirement in 2010 in Proposition 25, which also docks pay if lawmakers submit a late budget.
S&P also credited a rise in revenue growth as the economy recovers, as well as a series of recurring budget cuts that Gov. Jerry Brown and Democratic lawmakers enacted last year.
If the state does not approve taxes to help bridge the deficit this fall, S&P analyst Gabriel Petek said, lawmakers and Brown need to ensure that strict trigger cuts are in place beforehand. The governor has proposed mostly slashing payments to K-12 schools and higher education.
Editor's Choice Videos
Join the Discussion
The Sacramento Bee is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.